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An investor buys 20-year bonds, each having semiannual coupons and each maturing at par. For each bond the purchase price produces the same yield rate.
An investor buys 20-year bonds, each having semiannual coupons and each maturing at par. For each bond the purchase price produces the same yield rate. One bond has a par value of $500 and a coupon of $45. The other bond has a par value of $1000 and a coupon of $30. The dollar amount of premium on the first bond is twice as great as the dollar amount of discount on the second bond. Find the yield rate convertible semiannually.
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Lets break this problem down step by step Bond 1 Par value 500 Coupon 45 semiannual so annual coupon ...Get Instant Access to Expert-Tailored Solutions
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